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Rakhi Vasavada, Financial Advisor

Category: Finance

Satisfied Customers: 4545

Experience: Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years

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I have owned a rented property 14 years, but now

Customer Question

I have owned a rented property for around 14 years, but now wish to sell. I understand I will be liable for Capital Gains Tax. However, my own house is in disarray and barely habitable. It would make sense to move into the rented property for a while untilI have a buyer, then with some of the money I could do works to my own home. I am wondering if and how I can avoid paying this tax if the rented property becomes my official residence? How long would I have to live there for it to become so, and what stepsdo I need to take to do this officially?

Dear Friend, Hello and welcome. Thank you for providing an opportunity to assist you. YES -- I fully subscribe to your idea. It is perfectly proper to shift to your other home, which was until today a rented property. This will have dual benefits. First, since your own house is in disarray, it would make sense to convert your rented property into your residential property. This will give your some time and money to do works on your existing home. Second major benefit would be -- if you stay in that home for at least 12 months and above, it will be covered under the definition of "Private Residence" and will be eligible for Private Residence Relief (PPR). This will help you to legitimately avoid property capital gains tax. You will need to ensure that you have the following in order once you shift there: a) Have utility bills in your own name at the property address.b) Make the property address your voting address on the electoral register.c) Be able to demonstrate that you bought furniture and furnishings for the property. Keep receipts and prove that bulky furniture was delivered to the property address under your name.d) Have all bank statements delivered to the property address. The following is just for your guidance and general information. https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief#who-qualifies-for-relief I am sure this would help. I wish you good luck. You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,

Thanks, ***** ***** very helpful. Just one small question. It is unlikely that I will have any proof of bulk furniture delivery as I will be shifting my furniture in my own trailer. This isn't an issue is it, really?

NO..that cannot be a big / major issue at all. The utility bills, tax documents, bank statements etc are more important than documenting your furniture shift. This will be a very minor issue, in fact a non-issue.

No need to worry on this front.

I am sure this would help. I wish you good luck.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

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